The BATS Exchange, the Kansas City-based stock market, has announced the departure of President William O’Brien, effectively immediately.
In April, O’Brien made misleading statements about his trade orders were routed into the exchange, which the firm was then forced to correct a few days later.
O’Brien asserted that the exchange, the country’s second largest, gets its price orders directly from broker-dealers. That wasn’t true, and under pressure from regulators, the exchange clarified that it gets its them from NASDAQ’s SIP feed. By using the slower SIP feed, high-speed traders can use BATS as a forum to get price advantages.
This gaming of information access lies at the heart of Michael Lewis’ latest book, “Flash Boys.” Brad Katsuyama, the head of IEX group and of the book’s protagonists, had challenged O’Brien about the information source issue on CNBC.
So this appears to be real-world fallout from Lewis’ arguments.
CEO Joe Ratterman will take over as President.
Here’s their full statement: